The High Court has dismissed Promontoria (Oyster) DAC’s claim to enforce an equitable mortgage over commercial property in Littleton, Co. Tipperary, ruling that the proceedings were brought outside the time allowed by law.
Mr Justice Garrett Simons held that a €130,000 overdraft had to be repaid in full by 30 September 2008 under a special condition in the facility letter. The plaintiff argued that repayment was deferred until a demand was made or the borrowers chose to sell the property or restructure the borrowing. The judge rejected that interpretation.
The court found that restructuring required a fresh agreement between the borrowers and Ulster Bank. There was no suggestion that such an agreement had been made. The repayment obligation therefore arose automatically on the specified date; a formal demand was not needed to trigger it.
William Kearney, the first borrower, died on 25 August 2011. The judge concluded that the mortgagee’s cause of action had already accrued and was subsisting at the time of his death. Under section 9 of the Civil Liability Act 1961, proceedings to enforce the mortgage had to be brought within two years of the death. A demand was sent to J.J. Kearney, the personal representative, on 2 April 2020, and proceedings began on 18 June 2020—almost nine years after the death.
The defendant had argued that the claim was statute-barred and also relied on laches. The court’s decision was that the claim was statute-barred under section 9. It dismissed the proceedings seeking a well charging order and an order for sale. The judgment does not state a separate determination of the laches argument.
On costs, the judge gave a provisional view that the successful defendant should recover his costs. The plaintiff was given until 30 January 2023 to file submissions seeking a different costs order, with the defendant allowed three weeks to reply. If the plaintiff did not file submissions by the deadline, the provisional costs order would become final. The parties were also directed to file copies of their written submissions in the High Court Central Office.